Chapter 1
Copyright Cengage Learning. Powered by Cognero. Page 1
1.
,Chapter 1
Tax compliance is the process of:
ui ui ui ui ui
a. filing necessary tax returns ui ui ui
b. gathering the financial information necessary to report taxable income
ui ui ui ui ui ui ui ui
c. representing a taxpayer at an IRS audit ui ui ui ui ui ui
d. all of these are correct
ui ui ui ui
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 4/20/2017 2:12 PM
ui ui ui
2. Tax evasion is:
ui ui
a. a fraudulent act involving illegal nonpayment of taxes
ui ui ui ui ui ui ui
b. one of the objectives of tax planning
ui ui ui ui ui ui
c. an act of deferring tax payments to future periods
ui ui ui ui ui ui ui ui
d. the same a s tax avoidance as both of them result in nonpayment of taxes
ui ui ui ui ui ui ui ui ui ui ui ui ui
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
3. Tax litigation is a process of:
ui ui ui ui ui
a. participating in an administrative audit ui ui ui ui
b. settling tax-related disputes in a court of law
ui ui ui ui ui ui ui
c. filing amended tax returns as prescribed by tax laws
ui ui ui ui ui ui ui ui
d. arranging a taxpayer’s affairs to minimize tax liabilities
ui ui ui ui ui ui ui
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
4. Regarding open transactions, which of the following statements is INCORRECT?
ui ui ui ui ui ui ui ui ui
a. The transaction is not yet completed.
ui ui ui ui ui
b. The practitioner can suggest changes to achieve a better tax result.
ui ui ui ui ui ui ui ui ui ui
c. A tax practitioner has some degree of control over the client’s tax liability.
ui ui ui ui ui ui ui ui ui ui ui ui
d. The practitioner can fix the problem by amending the client’s tax return.
ui ui ui ui ui ui ui ui ui ui ui
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 1
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: ui Multiple Choice ui
HAS VARIABLES:
ui False
DATE CREATED:
ui 3/30/2017 11:37 AM ui ui
DATE MODIFIED:
ui 4/20/2017 3:15 PM ui ui
5. Which of the following statements best describes Circular 230?
ui ui ui ui ui ui ui ui
a. Circular 230 has been adopted by the AICPA a s its set of rules of practice for CPAs.
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
b. Circular 230 i s a set of Treasury Department ethical and legal standards for those engaging in practice before t
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
he IRS. ui
c. Circular 230 is a set of internal rules at the IRS designed to protect tax practitioners from unfair discipline by t
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
he IRS. ui
d. Circular 230 is a set of ethical rules for taxpayers.
ui ui ui ui ui ui ui ui ui
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
6. Who can represent a taxpayer before the IRS Appeals Office under Circular 230?
ui ui ui ui ui ui ui ui ui ui ui ui
a. a CPA ui
b. an officer of a corporation may represent the corporation
ui ui ui ui ui ui ui ui
c. an attorney ui
d. all of these are correct
ui ui ui ui
e. both a CPA and an attorney ui ui ui ui ui
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 4/20/2017 3:19 PM
ui ui ui
7. In a closed transaction, the scope of tax planning is:
ui ui ui ui ui ui ui ui ui
a. more limited as compared to an open transaction
ui ui ui ui ui ui ui
b. limited by the IRS rules of practice ui ui ui ui ui ui
c. limited to presenting the taxpayer’s facts to the government in the most favorable, legal manner
ui ui ui ui ui ui ui ui ui ui ui ui ui ui
d. more limited a s c ompared t o an open transaction and limited to presenting the taxpayer’s facts to the
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
government in the most favorable, legal manner ui ui ui ui ui ui
ANSWER: d
Copyright Cengage Learning. Powered by Cognero. Page 3
, Chapter 1
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: ui Multiple Choice ui
HAS VARIABLES:
ui False
DATE CREATED:
ui 3/30/2017 11:37 AM ui ui
DATE MODIFIED:
ui 4/20/2017 3:21 PM ui ui
8. Circular 230 includes rules on all of the following topics EXCEPT:
ui ui ui ui ui ui ui ui ui ui
a. who is authorized to practice before the IRS
ui ui ui ui ui ui ui
b. standards for “covered opinions” ui ui ui
c. compliance with state ethical requirements ui ui ui ui
d. a set of best practices to guide practitioners
ui ui ui ui ui ui ui
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
9. Statements on Standards for Tax Services (SSTS) contain advisory guidelines for:
ui ui ui ui ui ui ui ui ui ui
a. CPAs
b. enrolled agents ui
c. attorneys
d. IRS authorities ui
e. all of these are correct
ui ui ui ui
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 4/20/2017 3:31 PM
ui ui ui
10. An EA must renew his or her enrollment card on a:
ui ui ui ui ui ui ui ui ui ui
a. 5-year cycle ui
b. 3-year cycle ui
c. 2-year cycle ui
d. Renewal i s not required once an EA gets a card
ui ui ui ui ui ui ui ui ui
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
Copyright Cengage Learning. Powered by Cognero. Page 4
Copyright Cengage Learning. Powered by Cognero. Page 1
1.
,Chapter 1
Tax compliance is the process of:
ui ui ui ui ui
a. filing necessary tax returns ui ui ui
b. gathering the financial information necessary to report taxable income
ui ui ui ui ui ui ui ui
c. representing a taxpayer at an IRS audit ui ui ui ui ui ui
d. all of these are correct
ui ui ui ui
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 4/20/2017 2:12 PM
ui ui ui
2. Tax evasion is:
ui ui
a. a fraudulent act involving illegal nonpayment of taxes
ui ui ui ui ui ui ui
b. one of the objectives of tax planning
ui ui ui ui ui ui
c. an act of deferring tax payments to future periods
ui ui ui ui ui ui ui ui
d. the same a s tax avoidance as both of them result in nonpayment of taxes
ui ui ui ui ui ui ui ui ui ui ui ui ui
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
3. Tax litigation is a process of:
ui ui ui ui ui
a. participating in an administrative audit ui ui ui ui
b. settling tax-related disputes in a court of law
ui ui ui ui ui ui ui
c. filing amended tax returns as prescribed by tax laws
ui ui ui ui ui ui ui ui
d. arranging a taxpayer’s affairs to minimize tax liabilities
ui ui ui ui ui ui ui
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
4. Regarding open transactions, which of the following statements is INCORRECT?
ui ui ui ui ui ui ui ui ui
a. The transaction is not yet completed.
ui ui ui ui ui
b. The practitioner can suggest changes to achieve a better tax result.
ui ui ui ui ui ui ui ui ui ui
c. A tax practitioner has some degree of control over the client’s tax liability.
ui ui ui ui ui ui ui ui ui ui ui ui
d. The practitioner can fix the problem by amending the client’s tax return.
ui ui ui ui ui ui ui ui ui ui ui
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 1
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: ui Multiple Choice ui
HAS VARIABLES:
ui False
DATE CREATED:
ui 3/30/2017 11:37 AM ui ui
DATE MODIFIED:
ui 4/20/2017 3:15 PM ui ui
5. Which of the following statements best describes Circular 230?
ui ui ui ui ui ui ui ui
a. Circular 230 has been adopted by the AICPA a s its set of rules of practice for CPAs.
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
b. Circular 230 i s a set of Treasury Department ethical and legal standards for those engaging in practice before t
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
he IRS. ui
c. Circular 230 is a set of internal rules at the IRS designed to protect tax practitioners from unfair discipline by t
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
he IRS. ui
d. Circular 230 is a set of ethical rules for taxpayers.
ui ui ui ui ui ui ui ui ui
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
6. Who can represent a taxpayer before the IRS Appeals Office under Circular 230?
ui ui ui ui ui ui ui ui ui ui ui ui
a. a CPA ui
b. an officer of a corporation may represent the corporation
ui ui ui ui ui ui ui ui
c. an attorney ui
d. all of these are correct
ui ui ui ui
e. both a CPA and an attorney ui ui ui ui ui
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 4/20/2017 3:19 PM
ui ui ui
7. In a closed transaction, the scope of tax planning is:
ui ui ui ui ui ui ui ui ui
a. more limited as compared to an open transaction
ui ui ui ui ui ui ui
b. limited by the IRS rules of practice ui ui ui ui ui ui
c. limited to presenting the taxpayer’s facts to the government in the most favorable, legal manner
ui ui ui ui ui ui ui ui ui ui ui ui ui ui
d. more limited a s c ompared t o an open transaction and limited to presenting the taxpayer’s facts to the
ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui ui
government in the most favorable, legal manner ui ui ui ui ui ui
ANSWER: d
Copyright Cengage Learning. Powered by Cognero. Page 3
, Chapter 1
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: ui Multiple Choice ui
HAS VARIABLES:
ui False
DATE CREATED:
ui 3/30/2017 11:37 AM ui ui
DATE MODIFIED:
ui 4/20/2017 3:21 PM ui ui
8. Circular 230 includes rules on all of the following topics EXCEPT:
ui ui ui ui ui ui ui ui ui ui
a. who is authorized to practice before the IRS
ui ui ui ui ui ui ui
b. standards for “covered opinions” ui ui ui
c. compliance with state ethical requirements ui ui ui ui
d. a set of best practices to guide practitioners
ui ui ui ui ui ui ui
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 3/30/2017 11:37 AM
ui ui ui
9. Statements on Standards for Tax Services (SSTS) contain advisory guidelines for:
ui ui ui ui ui ui ui ui ui ui
a. CPAs
b. enrolled agents ui
c. attorneys
d. IRS authorities ui
e. all of these are correct
ui ui ui ui
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
DATE CREATED: 3/30/2017 11:37 AM
ui ui ui
DATE MODIFIED: 4/20/2017 3:31 PM
ui ui ui
10. An EA must renew his or her enrollment card on a:
ui ui ui ui ui ui ui ui ui ui
a. 5-year cycle ui
b. 3-year cycle ui
c. 2-year cycle ui
d. Renewal i s not required once an EA gets a card
ui ui ui ui ui ui ui ui ui
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice ui ui
HAS VARIABLES: False
ui
Copyright Cengage Learning. Powered by Cognero. Page 4
